SAP Business ByDesign Intercompany Process Automation

Introduction

SAP Business ByDesign delivers by default an automation of intercompany processes. In this blog post I will describe the general configuration and the detailed configuration for the purchase order to invoice process of two companies in the same Business ByDesign system.

But at the beginning something in general…Business ByDesign offers the possibility to have so many companies in the same system as you like but there is one important restriction.

You cannot strictly separate the data of these companies. The financial data is certainly separated according to tax law but you cannot deny the (read) access to most of the data (Customers, Sales Order etc.)

But if that is no problem for the companies, ByDesign offers very efficient processes between those.

Let`s start with configuration…

Pre-requirements

The pre-requirement for ByDesign intercompany processes is certainly the existence of at least two companies in organizational management (two different org units with flag “Company”).

Further we have to answer the “communication questions” in business configuration with “yes”.

Here are two examples:

Sales Order Confirmation:

Supplier Invoice:

Example process description

Before I explain the further configuration, I will give you a short overview of the example process, I would like to model:

Innovat GmbH will order some office materials from Almika GmbH. They create a purchase order for that.

ByDesign should create automatically a sales order for Almika GmbH and it should be automatically confirmed (-> automatically acknowledge of customers purchase order).

Almika GmbH writes a customer invoice which will be automatically available as supplier invoice for Innovat GmbH.

Further configuration

So now at first you have to change the communication property for “customer” Innovat GmbH in Account Management and for “supplier” Almika GmbH in the Supplier Base to “Internal EDX”.

Customer Innovat GmbH

Supplier Almika GmbH

In addition to these settings you have to verify that sales data and financial data for Innovat GmbH is configured correctly:

Sales Data

Financial Data

So because we want to buy and sell a product, we have to insert the right data for both processes. This setting has to be done first in Product and Service Portfolio. For my example process, I selected the product P100800 (Office Supplies – Paper packages). For this product we have to activate the purchasing (Innovat GmbH):

And we have to insert the sales data (Almika GmbH):

We also have to ensure that all other data in (Logistics/Planning etc.) are inserted correctly but that`s not only relevant for the intercompany process but in general. Another thing that is not only relevant for intercompany process but that is necessary, is the sales price. You could insert it in every sales order manually but in respect of the automation, I prefer the price list (Take your choice! J).

Example process test

So now all settings are done and we can start testing…

Innovat GmbH

I create a purchase order for Innovat GmbH, supplier is Almika GmbH.

Almika GmbH

Ta-da! ByDesign created automatically a sales order for “customer” Innovat GmbH.

The order is not only created, it`s also confirmed cause of the a corresponding question in scoping.

Because Almika GmbH has the requested materials in stock, I only have to release the customer demand in the Outbound Logistics Control work center and post the Goods Issue (Release).

Innovat GmbH

The materials are delivered and we can confirm the receipt.

Almika GmbH

Now Almika writes a customer invoice. The invoice request therefor was automatically created by the delivery.

Innovat GmbH

Business ByDesign creates automatically a task to confirm this customer invoice as supplier invoice for Innovat GmbH.

17 Comments

nice overview of logistics, procurement, and billing, but except for the first graphic showing ownership structure, i don’t see much in a way of financial intercompany processing.

here are my questions:1. are you planning to show an AR/AP due to/from in the General Ledger of either company? 2. is there some kind of reconciliation tool (similar to ECC FBICR3) that lists reciprocal AR/AP for each company? 3. what is the clearing process of removing open balances when cash is being netted across the holding?4. is there a subsequent process of eliminating outstanding AR/AP balances in a consolidation process resulting in 0 balance at the holding company level?

ByDesign seems to be a great tool, but i’m not quite sure how much different from ECC from the business process rather than technical perspective.

this blog post is focused on the automation, not on the financial perpective but I will try to give some ad-hoc answers.

1. I haven`t planned that but I could do it in a next blog.

2. I don`t know ECC FBICR3 but you can certainly list reciprocal AR/AP for each company.

3.+ 4. Currently, ByDesign does not offer an integrated consolidation process but it offers a “preperation for consilidation”. That means you have a report which gives you the information you need to do the consolidation outside from ByDesign (Financial Statements – Preliminary Consolidation Elimination). Another option is to export data to an external consolidation system. That`s enough for our customers…in my experience.In ByDesign an holding is only “another” affiliated company.

Andreas, what about inter-comany ordering of non-stock materials or services. Are we looking at a similar process. I see the services piece being very important for the pro-serve market. (e.g. consultants working on inter-company projects, etc.)

Also while the automation is fantastic, the financial transactions are equally as important.

Judson, I did it in our Sales Demo Tenant for FP3.0. Now in FP3.5 / FP4.0 there are new/more options. I’m already planning to write a new version of this blog but currently found no time to do that 🙁 In this new blog I should like to include financial view as well.

We have some customers who use it for non-stock materials/services (including Data One itselfs) and we have one manufacturer who use the scenario for his stock based materials. Both options are possible…

we also implemented this process at SuccessFactors: 38 companies world-wide; their implementation projects all run in the US company and are staffed with people around the world, even external partners.

Here are the most important things I remember from this implementation:

– sales responsibility has to be set up correctly in order to get the sales orders created automatically in the delivering company. This includes an employee responsible for these sales orders. If you pay commissions based on sales orders you might want to set up a dummy user for this.

– make sure that every employee has their address maintained correctly in order to be able to do the time recording and have the goods receipts being posted automatically out of those. For the US this includes the tax jurisdiction code!

– each company needs to have their tax registration set up in the needed companies.

I find that the items you listed are best practice in general. I’m looking forward to getting back into the multi-company, multi-currency game, as I was an expert at all things ‘multi’ back in my PeopleSoft days!